After a four-month review, Fifth Third Bancorp reached agreement with federal and state regulators, which will force the Cincinnati banking giant to hire a consultant to oversee most of its operations.

The written agreement was received as good news by Wall Street. Fifth Third's stock closed at $53.07 Thursday, up $1.27, on a day when other bank stocks fell.

But the long-anticipated agreement tied to internal accounting problems also did not specifically answer a key question:

How will it affect Cincinnati-based Fifth Third's ability to buy other banks and thrifts, a key part of the bank's revenue and earnings growth for the past decade?

The agreement between the parent of Fifth Third Bank and the Federal Reserve Bank of Cleveland and the Ohio Department of Financial Institutions did not address the issue. When contacted, the Fed said it had no comment on the issue. Fifth Third, meanwhile, said the agreement was "silent on the matter."

The agreement calls for many steps to strengthen the bank's risk management processes and internal controls.

The deal means Fifth Third, whose shares have dropped 16 percent since the review was launched last fall, will, among other things:

 Hire an outside consultant to review the bank's "structure, functions, composition and performance of management."

 Submit written policies tied to its risk management and accounting procedures and periodic review of the efficacy of the policies.

The agreement comes after Fifth Third said in a regulatory filing in November that it would take a $54 million after-tax write-off against third-quarter profits in 2002. The issue involves investments that the bank made through its treasury operations, not customer accounts. The filing prompted regulators to launch an informal review of internal controls in its treasury operations tied to its $5 billion purchase of Old Kent Financial Corp. that closed two years ago.

Although Fifth Third posted record profits of $1.6 billion for 2002, its stock has fallen from $62.53 a day before it disclosed the filing to $53.07 Thursday - more than $5.4 billion in market value.

Yet, many banking analysts are still bullish on Fifth Third, saying its consistent ability to boost profits faster than most peers should help it remain a Wall Street darling. Some analysts think the bank can grow with or without acquisitions.

"This agreement helps erase the uncertainly on what action the Fed would take," said David Long of Robert W. Baird & Co. in Chicago. Thursday's rise in the share price "is a reaction to removing a dark cloud hanging over the stock."

He also said Fifth Third has been cooperative, including doubling the size of its auditing staff and hiring independent consultants to improve its risk management and accounting functions before the Fed agreement.

Long said he thought the Fed agreement overrides an earlier supervisory letter that put a stop on Fifth Third's acquisitions.

Bradley Vander Ploeg of Raymond James & Associates in Chicago was surprised the agreement did not include details about Fifth Third's ability to do more deals.

He questioned whether that could have been tied to Fifth Third's announcement Thursday that it has extended the date to June 30, 2004, to acquire Tennessee's Franklin Financial Corp. He said Fifth Third agreed to pay Franklin $31 a share. Vander Ploeg said that's about $6 a share more than it agreed to when the deal was first announced last July. Franklin's stock rose $8.65, or 42 percent, to $29.15 Thursday. Franklin also can reap a $27 million termination fee if the deal is not approved by the Fed by May 31, 2004.